U.S. trade offensive and the implications for Ireland
As the new U.S. administration recalibrates its global trade stance, tariffs are now a key negotiating and policymaking tool. Recent measures have moved from speculation to clear intent and impact, as key executive orders are already affecting industries worldwide.
Ireland, long a beneficiary of U.S. foreign direct investment, finds itself in an uncomfortable position.
While tariff measures now come with strict timelines and defined targets, they are also malleable. As we have seen with the approach to Canada and Mexico, Trump’s “America First” trade policy has emphasised tariffs as both a protective measure and a bargaining chip. However, in recent weeks, Trump has also shown he is willing to follow through on threats with policy.
This makes it even more important that Irish businesses cut through the noise of the U.S.’s evolving trade strategy. Respond, don’t react.
Trade tariffs part 1: Separating fact from fiction
This series cuts through the speculation to identify the real and potential impacts on Ireland and Irish-based industries. It explains how tariffs affect the economy and explores what businesses can do to mitigate negative effects.
The global trade environment is shifting significantly, with more changes on the horizon. Martin Shanahan, Head of Industry at Grant Thornton, breaks down what businesses really need to know about trade tariffs—cutting through the noise to focus on the facts.
Watch Part 1 of our series to learn more.
From rhetoric to policy
Trump’s “America First” trade policy has emphasised tariffs as both a protective measure and a bargaining chip. His administration has framed tariffs as a necessary tool to restore U.S. manufacturing strength and address trade imbalances.
During his campaign, Trump frequently cited Ireland alongside China and Germany as beneficiaries of outdated trade agreements. His administration has signalled its intent to counter what it views as unfair trade practices, including Europe’s VAT regime and regulatory environment, which U.S. officials claim disadvantage American exporters.
While initially some of these statements may have been seen as posturing, the Trump administration has begun to translate rhetoric into policy.
In early February, Trump reiterated a warning to the European Union that tariffs “will definitely happen,” citing a large trade deficit with the bloc. A second wave of tariffs looms.
Ireland’s position in U.S. trade policy
Ireland has been a major beneficiary of U.S. foreign direct investment, with American multinationals in technology, pharmaceuticals, and finance forming the backbone of its modern economy. U.S.-Irish trade surpassed €73 billion in 2024, with Ireland serving as a key gateway for American firms into the EU market. However, it also means that Ireland had a goods-trade surplus with the U.S. of just over €50 billion.
In 2024, Ireland climbed to fourth place—behind China, Mexico, and Vietnam—on the list of countries with which the U.S. has a goods-trade deficit, overtaking Germany and Japan.
Washington’s growing concern over trade imbalances and tax policies has led to increased scrutiny, with the Trump administration signalling potential action against perceived “unfair advantages,” including Europe’s VAT regime and regulations that it claims hurt U.S. exporters.
Potential impacts on key industries
From an Irish perspective, the state’s biggest exposure is likely the pharmaceutical sector. Reports from February suggest that pharmaceutical industry leaders were privately warned of impending tariffs and encouraged to move manufacturing to the U.S. Given Ireland’s role as a global pharmaceutical hub, any policy shift in this direction could have profound effects on supply chains, investment, and job creation.
Beyond direct tariffs, Trump’s decision to withdraw the U.S. from the OECD tax framework introduces another layer of uncertainty for multinational companies headquartered in Ireland. While digital services taxes have not yet been targeted, Trump has previously railed against EU regulatory measures on big tech, raising the risk of these issues becoming entangled in broader trade conflicts.
Key executive orders
As of early March, President Trump has signed more than 70 executive orders. Several are directly relevant to Irish businesses:
| Executive order | Impact |
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Order to promote an “America First Trade Policy”
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Signalled an aggressive trade stance to address the U.S.’s annual trade deficits. This shift toward using tariffs as leverage clearly increases uncertainty for Irish exporters.
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Order to withdraw from the OECD tax framework
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While digital services haven’t been singled out in the first wave of tariff discussions, Trump has previously railed against EU regulation of big tech, and the move creates uncertainty for multinationals headquartered in Ireland. There is a risk that long-running discussions about digital services taxes or other regulatory measures could be drawn into a wider trade conflict.
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Order to impose 25% tariff on all U.S. steel and aluminium imports
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Tariffs on aluminium and steel will drive up costs for some exporters, but this is not a major direct hit for Ireland, where exports of both are small.
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Order to impose 25% tariff on Canadian and Mexican goods
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While the orders don’t have a particularly direct impact on Ireland, they do provide a clear signal of how the administration’s approach works in practice. Tariffs on Canada and Mexico were delayed soon after being announced, following negotiations with their leaders. Both suspensions expired on March 4, leading to market turmoil. Canada and Mexico announced retaliatory import levies. U.S. Commerce Secretary Howard Lutnick signalled that the U.S. could quickly cut a deal to reduce tariffs on Canada and Mexico after talks.
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Ireland’s response
The Irish government has acknowledged the potential fallout from these policy changes.
Ireland, as an EU member, has little direct influence over U.S. trade policy. The European Commission will take the lead in negotiations and potential countermeasures. The EU has signalled it will not sit idly by.
The European Commission will lead negotiations on trade matters, and history suggests that tariffs could be used as leverage for further deals. In 2018, the EU responded to U.S. steel and aluminium tariffs with its own set of countermeasures, and a similar approach may follow if Trump escalates his tariff strategy.
For Irish businesses, the message is clear: prepare for volatility.
To avoid paralysis by anxiety, the focus needs to stay on what has happened while taking a clear-eyed look at what is promised, what is still in play, and what the real impacts might be. Companies should be evaluating supply chains, pricing strategies, and market exposure to mitigate risk.
While the U.S. remains Ireland’s largest trading partner, the evolving trade environment presents challenges that cannot be ignored. The test now is not just reacting to Trump’s policies but responding with strategic planning.
